Since the emergence of affiliate marketing, there has been little control over affiliate activity. Unscrupulous affiliates have used spam, false advertising, forced clicks (to get tracking cookies set on users' computers), adware, and other methods to drive traffic to their sponsors. Although many affiliate programs have terms of service that contain rules against spam, this marketing method has historically proven to attract abuse from spammers.
E-mail spam
In the infancy of affiliate marketing, many Internet users held negative opinions due to the tendency of affiliates to use spam to promote the programs in which they were enrolled. As affiliate marketing matured, many affiliate merchants have refined their terms and conditions to prohibit affiliates from spamming.
Search engine spam
As search engines have become more prominent, some affiliate marketers have shifted from sending e-mail spam to creating automatically-generated webpages that often contain product data feeds provided by merchants. The goal of such webpages is to manipulate the relevancy or prominence of resources indexed by a search engine, also known as spamdexing. Each page can be targeted to a different niche market through the use of specific keywords, with the result being a skewed form of search engine optimization.
Spam is the biggest threat to organic search engines, whose goal is to provide quality search results for keywords or phrases entered by their users. Google's PageRank algorithm update ("BigDaddy") in February 2006—the final stage of Google's major update ("Jagger") that began in mid-summer 2005—specifically targeted spamdexing with great success. This update thus enabled Google to remove a large amount of mostly computer-generated duplicate content from its index.
Websites consisting mostly of affiliate links are regarded negatively as they do not offer quality content. In 2005 there were active changes made by Google, where certain websites were labeled as "thin affiliates". Such websites were either removed from Google's index or were relocated within the results page (i.e., moved from the top-most results to a lower position). To avoid this categorization, affiliate marketer webmasters must create quality content on their websites that distinguishes their work from the work of spammers or banner farms, which only contain links leading to merchant sites.
Affiliate links work best in the context of the information contained within the website itself. For instance, if a website contains information pertaining to publishing a website, an affiliate link leading to a merchant's Internet service provider (ISP) within that website's content would be appropriate. If a website contains information pertaining to sports, an affiliate link leading to a sporting goods website may work well within the context of the articles and information about sports. The goal is to publish quality information within the website and provide context-oriented links to related merchant's websites.
Adware
Although it differs from spyware, adware often uses the same methods and technologies. Merchants initially were uninformed about adware, what impact it had, and how it could damage their brands. Affiliate marketers became aware of the issue much more quickly, especially because they noticed that adware often overwrites tracking cookies, thus resulting in a decline of commissions. Affiliates not employing adware felt that it was stealing commission from them. Adware often has no valuable purpose and rarely provides any useful content to the user, who is typically unaware that such software is installed on his/her computer.
Affiliates discussed the issues in Internet forums and began to organize their efforts. They believed that the best way to address the problem was to discourage merchants from advertising via adware. Merchants that were either indifferent to or supportive of adware were exposed by affiliates, thus damaging those merchants' reputations and tarnishing their general affiliate marketing efforts. Many affiliates either terminated the use of such merchants or switched to a competitor's affiliate program. Eventually, affiliate networks were also forced by merchants and affiliates to take a stand and ban certain adware publishers from their network. The result was Code of Conduct by Commission Junction/beFree and Performics, LinkShare's Anti-Predatory Advertising Addendum, and ShareASale's complete ban of software applications as a medium for affiliates to promote advertiser offers. Regardless of the progress made, adware continues to be an issue, as demonstrated by the class action lawsuit against ValueClick and its daughter company Commission Junction filed on April 20, 2007.
Trademark bidding
Affiliates were among the earliest adopters of pay per click advertising when the first pay per click search engines such as Goto.com (which later became Overture.com after being acquired by Yahoo! in 2003) emerged during the end of the 1990s. Later in 2000 Google launched its pay per click service, Google AdWords, which is responsible for the widespread use and acceptance of pay per click as an advertising channel. An increasing number of merchants engaged in pay per click advertising, either directly or via a search marketing agency, and realized that this space was already well-occupied by their affiliates. Although this situation alone created advertising channel conflicts and debates between advertisers and affiliates, the largest issue concerned affiliates bidding on advertisers names, brands, and trademarks. Several advertisers began to adjust their affiliate program terms to prohibit their affiliates from bidding on those type of keywords. Some advertisers, however, did and still do embrace this behavior, going so far as to allow, or even encourage, affiliates to bid on any term, including the advertiser's trademarks.
Lack of self-regulation and collaboration
Affiliate marketing is driven by entrepreneurs who are working at the edge of Internet marketing. Affiliates are often the first to take advantage of emerging trends and technologies. The "trial and error" approach is probably the best way to describe the operation methods for affiliate marketers. This risky approach is one of the reasons why most affiliates fail or give up before they become successful "super affiliates", capable of generating US$10,000 or more per month in commission. This "frontier" life combined with the attitude found in such communities is likely the main reason why the affiliate marketing industry is unable to self-regulate beyond individual contracts between advertisers and affiliates. Affiliate marketing has experienced numerous failed attempts to create an industry organization or association of some kind that could be the initiator of regulations, standards, and guidelines for the industry. Some examples of failed regulation efforts are the Affiliate Union and iAfma.
Online forums and industry trade shows are the only means for the different members from the industry—affiliates/publishers, merchants/advertisers, affiliate networks, third-party vendors, and service providers such as outsourced program managers—to congregate at one location. Online forums are free, enable small affiliates to have a larger say, and provide anonymity. Trade shows are cost-prohibitive to small affiliates because of the high price for event passes. Larger affiliates may even be sponsored by an advertiser they promote.
Because of the anonymity of online forums, the quantitative majority of industry members are unable to create any form of legally binding rule or regulation that must be followed throughout the industry. Online forums have had very few successes as representing the majority of the affiliate marketing industry. The most recent example of such a success was the halt of the "Commission Junction Link Management Initiative" (CJ LMI) in June/July 2006, when a single network tried to impose the use of a Javascript tracking code as a replacement for common HTML links on its affiliates.
Lack of industry standards
Certification and training
Affiliate marketing currently lacks industry standards for training and certification. There are some training courses and seminars that result in certifications; however, the acceptance of such certifications is mostly due to the reputation of the individual or company issuing the certification. Affiliate marketing is not commonly taught in universities, and only a few college instructors work with Internet marketers to introduce the subject to students majoring in marketing.
Education occurs most often in "real life" by becoming involved and learning the details as time progresses. Although there are several books on the topic, some so-called "how-to" or "silver bullet" books instruct readers to manipulate holes in the Google algorithm, which can quickly become out of date, or suggest strategies no longer endorsed or permitted by advertisers.
Outsourced Program Management companies typically combine formal and informal training, providing much of their training through group collaboration and brainstorming. Such companies also try to send each marketing employee to the industry conference of their choice.
Other training resources used include online forums, weblogs, podcasts, video seminars, and specialty websites.
Affiliate Summit is the largest conference in the industry, and many other affiliate networks host their own annual events.
Threat to traditional affiliate networks
Cost per action networks can be viewed as a threat to "classic" affiliate marketing networks. Traditional affiliate marketing is resource-intensive and requires continual maintenance. Most of the maintenance includes managing, monitoring, and supporting affiliates. The goal of affiliate marketing is directed toward long-term and mutual beneficial partnerships between advertisers and affiliates. Cost per action networks, however, eliminate the need for the advertiser to build and maintain relationships to affiliates, as that task is performed for the advertiser by the cost per action network. The advertiser makes an offer, almost always CPA-based, and the cost per action networks handle the remainder of the process by mobilizing their affiliates to promote that offer. Cost per sale and revenue sharing are the primary compensation models for classic affiliate marketing, and are rarely found in cost per action networks. Affiliate marketers typically avoid the topic of cost per action networks; however, if it is being discussed, the debates can become heated and explosive.
Marketing term
Members of the marketing industry are recommending that "affiliate marketing" be substituted with an alternative name. Affiliate marketing is often confused with either network marketing or multi-level marketing. Performance marketing is a common alternative, but other recommendations have been made as well.
Sales tax vulnerability
In April 2008 the State of New York inserted an item in the state budget asserting sales tax jurisdiction over Amazon.com sales to residents of New York, based on the existence of affiliate links from New York-based websites to Amazon. The state asserts that even one such affiliate constitutes Amazon having a business presence in the state, and is sufficient to allow New York to tax all Amazon sales to state residents. It is expected that Amazon will challenge this issue in court.
Cookie stuffing
Cookie stuffing involves placing an affiliate tracking cookie on a website visitor's computer without their knowledge, which will then generate revenue for the person doing the cookie stuffing. This not only generates fraudulent affiliate sales, but also has the potential to overwrite other affiliates' cookies, essentially stealing their legitimately earned commissions.
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